Alibaba began operating in 1999 with the strategy of creating a business-to-business (B2B) network, to connect Chinese manufacturers to buyers and importers around the world. With just a small setup, in the beginning, the company has now expanded to become the largest e-commerce company in the world in terms of its gross merchandise volume (GMV).
With the aim of making business easier, Alibaba now has a record 454 million annual active buyers on its marketplaces. The company’s main objective was to make trade more inclusive, thereby giving business merchants a chance to collaborate and grow economically.
What is Alibaba OneTouch?
Alibaba OneTouch is an import-export service affiliated with Alibaba itself, 7 years ago. The main reason for its introduction was to end logistics complications for suppliers. With the increase of shipping business, the global shipping industry is going through a rough time. Some of them include the strict customs inspections, varying cargo rates, overcapacity issues and the audit of import-export documentation.
On the verge of these difficulties, Alibaba took advantage of the situation. Its OneTouch service helps Chinese suppliers to directly book places on a container ship via the internet. They no longer have to go through the hassle of dealing with third-party logistics companies and freight forwarders as now Alibaba controls everything. Hence, OneTouch is a platform that connects e-commerce and logistics companies.
With Alibaba soaring worldwide, the company also wanted to end its shipping fiascos by making sure that services reach to the other part of the world safely. It soon collaborated with big names like Maersk, Zim, and CMA CGM, out of which Maersk only was connecting 25% of all container ships from China to US buyers.
OneTouch had a perspective to help small-scale Chinese suppliers export as easily as the big ones. As compared to Amazon, Alibaba solved issues regarding licensing, freight and bargaining. With just as many advantages, there are also a number of risks associated when using OneTouch. Let us look at both in detail below:
Advantages of OneTouch
– OneTouch allows suppliers to send their containers to any destination of the customer’s choice.
– OneTouch gives small businesses in China a chance to connect with suppliers worldwide.
– Previously, Alibaba did not have any history of the transactions occurred between a supplier and its importer. However, through OneTouch, all client information goes to Alibaba, which is later used for analysis.
– After connecting with one buyer, the suppliers are recommended a list of suitable buyers from all parts of the world to further increase their business.
– With all the data in hand, Alibaba now easily controls with shipping companies, which, the suppliers are now free from.
– Alibaba also lets you track your shipping orders easily through OneTouch online. This is for both buyers and suppliers.
Risks associated with OneTouch
Risks are everywhere. With every growing business, there is always a possibility of a potential drawback. So is with OneTouch and importing products from China.
– Foreign clients of OneTouch are charged with subsidies on their first order, which is by the way pretty high. However, this only happens for the first time. This is done to attract repeated customers so a strong partnership can be made with them.
– The higher inspection rate with import and export goods.
– The audit of import and export documents
– High VAT applied to foreign goods.
– Potential delays due to inspections at both buyers and supplier’s end.
– Supervision of processing trade since everything is booked on the internet.
– Strict measures implied by the General Administration of Customs.
– Delays due to terminal congestions
– OneTouch does not provide a warranty on any products in custom.
– If the goods or not packed according to the requirements, OneTouch will deliver them back to the sender.
– OneTouch is not held responsible for any damage occurred during shipment.
– If the product does not follow proper safety certifications, there is a risk that the customs official might refuse its entry.
– If you are a buyer and don’t have a liability insurance, the products will not be allowed to be shipped in case of any damage.
– Sometimes the products reach the suppliers in a damaged condition. You can have your shipment fully inspected but that will cost you a double and take more time than usual.
How to avoid risks associated with OneTouch?
Obviously, as businesses grow risks grow too. When you’re dealing with buyers from all parts of the world, there are different laws for shipping and inspection. Importing goods from China through OneTouch may seem easy and perfect until you get into trouble.
This part of the article guides on how to avoid risks when cooperating with OneTouch.
– Screen your suppliers before making business with them. You must know their complete history and the quality standards they follow when exporting.
– You must know who the suppliers are who they claim to be. Online businesses can expose many frauds.
– Do not settle for any supplier just because they ask less money.
– Make sure both parties sign a proper sales contract before the business starts.
– Make sure there is a quality inspection done on the supplier’s side before shipping. This is to ensure the products follow safety standards if they go through a customs check later on.
– Each country has a different import-export policy. If the buyer is in the UK, you need to know all rules that they follow.
– Have a solid paperwork including all documentation at both ends.
– All products must have their own liability and meet safety standards.
– As in case of OneTouch, when you have an overseas supplier, ensure what payment you and your supplier have to pay. Get all calculations, currency conversions are done before the shipment arrives.
Online business is as risky as it is fruitful. You must follow all the standard criteria when cooperating with OneTouch. Note that the fast sea shipping does not accept OneTouch so you must not select them for importing.
You can choose cargo and liner shipping that usually Maersk, Zim and CMA CGM do and they entail importing the relevant shipment material as well. The success will be guaranteed depending on how well you manage and mitigate the risks associated with the import of the material.
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